Caseware Africa’s new application will revolutionise how SMEs create financial statements

Kenya, 30 August 2022: Caseware Africa, a division of Adapt IT, has introduced a new cloud-based app in Kenya: SME Financial Statements. The new solution, which will be rolled out to various African regions, has been completely redesigned to leverage the benefits of the cloud, as well as everything Caseware has learned from its clients over the past decades, says Nienke Krüger, Product Manager: Financial Reporting at Caseware Africa.

“This new cloud-based application has been designed from the ground up to revolutionise the way that preparers create financial statements. We have leveraged our extensive experience over many years with our clients to design a process that is user-friendly and streamlined,” she says. “The new approach takes into account regulators’ growing insistence that only material information is presented in the financials – something that can prove quite tricky for inexperienced or infrequent users.”

SME Financial Statements uses checklists, questionnaires and integrated queries that expand and collapse, only displaying content relevant to the current engagement. This will enable users to work much more efficiently by empowering them to focus their time only on relevant items and will greatly assist them in streamlining the process to produce the financial statements as the final output document.

Another big advantage of SME Financial Statements is that it enables users to integrate the trial balance information directly from the company’s accounting package. This eliminates the tiresome, error-prone, and manual process of exporting and importing data via spreadsheets. Currently, direct integrations from Xero, QuickBooks and Sage Business Cloud Accounting are supported, with more packages to be added in line with market demands.

These features provide users with significant timesaving and greatly reduces room for error, Ms Krüger says. A built-in workflow ensures that information is entered only once, reducing the risk of inconsistencies, duplication, and errors. The solution also allows users to insert logos and graphs into the financial statements and save external documents in the same file.

“SME Financial Statements is powered by Caseware Cloud and can be accessed from any device at any location, completely secure, at any time. It enables multiple users to work on the same document at the same time, thus supporting greater collaboration between team members across both the client and accounting firms. That makes for huge productivity gains,” Ms Krüger says. “It’s also much easier to update the application as new functionality is added.

“This app has been carefully designed based on Caseware Africa’s vast experience and intellectual property to assist preparers to create accurate SME compliant statements as quickly and painlessly as possible” says Ms Krüger.

Ms. Krüger confirms that this is a significant development for Africa’s SMEs. “In due course, post the introduction of SME Financial Statements in the Kenyan market, the app will be rolled out to other regions across the continent, which presents an exciting opportunity for practices and SMEs to enhance their business efficiencies as they continue to strive for growth.”

Integrating monthly, interim, and annual financial statements for efficiency gains

By Nienke Krüger, Product Manager: Financial Reporting, Caseware Africa

Annual financial statement reporting is a process with which finance professionals are very familiar. As this is a statutory requirement, a lot of the yearly planning is built around it, and rightly so. However, the process can be an onerous one, particularly since queries and corrections might relate to transactions from up to a year ago.

Additional reporting is also required throughout the year, and management may need reports at shorter intervals in order to stay abreast of the organisation’s financial status.

In many organisations, the annual, interim, and monthly reports are approached as independent reporting processes, resulting in a disjointed approach that duplicates effort and consumes a great deal of time.

This begs the question of whether we are missing an opportunity to streamline all reporting processes by integrating them.

What is defined as the interim financials?

Different industries use different terminology for financial reporting that is not prepared on an annual basis.

Interim financial statements are defined by IAS 34 and although this standard does not prescribe who must prepare interim financials, it does provide the requirements of how they must be prepared. They are mostly performed by listed entities, but also by some specific industries that are regarded as more volatile.

Management accounts or monthly board packs

These are not legislatively regulated and are normally produced for management and other stakeholders who might not be intimately involved in the detail of the business on a daily basis. Management accounts originated from the manufacturing sector where there was a need to prepare a profit and loss statement on the basis of cost accounting rather than IFRS/SME standard.

Other industries adopted this procedure also but more from a monthly balance sheet and income statement perspective with the same grouping as that of annual financial statements.

Integration benefits

By integrating and aligning the reporting requirements, organisations are essentially preparing their annual and interim statements throughout the year, as they prepare monthly reports.

This is perhaps where the biggest efficiency gain will be for an organisation, not only on a monthly basis, but also enabling management during the audit period to get back to running their businesses a lot quicker as there are no surprises at year end.

  • As you are preparing management accounts on a monthly basis, you will stay close to the numbers, and therefore, any adjustment or analysis of the transactions can be done with the details at the forefront.
  • The grouping of the accounts is also performed monthly, and as such, the audit can commence with no changes required to the line items on the financials. This also helps to avoid duplication of work due to rework on audit packs as groupings are amended.
  • Adjustments can be made throughout the year for depreciation; expected credit loss calculations etc., and this increases the predictability of more accurate final numbers.
  • Provisional tax calculations are more accurate and therefore, the risk of incurring interest and penalties is less likely.
  • Then for the issue that is perhaps the most relevant to businesses – cash! This will enable you to have more accurate cash flow projections and make more informed operational decisions.
At Caseware Africa, we encourage the principle of one data source as this empowers our clients to have one version of the truth. This in turn enables you to have greater confidence in the information presented and make operational decisions that are right for your business. We believe if you use the annual solution, on a monthly basis, you can achieve the monthly board packs you require and if you need a more robust solution, you can also use the Interim template. But all emanating from the same data source and building on the work performed on a monthly basis for the efficient preparation of your annual financial statements.

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